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Tunas Baru Lampung to raise Rp286b from private placement
Plantation firm Tunas Baru Lampung said on Monday that it planned to secure up to Rp 286 billion (US$23
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lantation firm Tunas Baru Lampung said on Monday that it planned to secure up to Rp 286 billion (US$23.74 million) by issuing shares, pending approval from a general shareholders meeting to be held next month.
According to a prospectus published on the Indonesian Stock Exchange (IDX) website on Thursday, Tunas Baru Lampung will issue up to Rp. 400 million worth of shares once it gets consent from a shareholders meeting on Nov. 11.
The shares to be floated are equal to 8.09 percent of the company's paid up capital, the prospectus says.
Each of the shares will be priced at Rp 715, which means the company will pocket up to Rp 286 billion once the shares are issued.
The price has been set higher than the average closing price in the last 25 days of trade, which stood at Rp 679.
The prospectus says that the funds to be raised from the private placement will be used to finance the company's working capital.
'By issuing the shares we hope to strengthen our company's capital structure,' the statement read.
'More shares to be floated also means that our liquidity in the market will increase,' it says.
With the private placement, the company's shareholders will have its ownerships diluted by about 7.49 percent.
Currently, Sungai Budi and Budi Delta Swakarya hold 30.05 percent and 28.63 percent of the company's shares, respectively. The investing public holds a 41.22 percent share.
After the private placement, Su-ngai Budi and Budi Delta Swakarya will hold 27.8 percent and 26.49 percent, while the investing public's share will increase to 45.62 percent.
Its first-half financial result showed that the company's net sales rose around 63 percent from Rp 1.68 trillion last year to Rp 2.73 trillion this year, according to research by Maybank Kim Eng.
Tunas Baru's net profit rose around 75 percent in the first six months of the year to Rp 213 billion, from Rp 122 billion in the same period last year. The company has yet to officially announce its first-half performance.
Tunas Baru Lampung owns 56,747 hectares of oil palm plantations in Lampung; Palembang, South Sumatra; and Pontianak, West Kalimantan.
The company's fresh fruit bunch (FFB) production hit 333,526 tons in the first half of the year, rising by about 67 percent from 199,174 tons last year.
The publicly listed firm enjoyed a 24 percent increase in its average selling price (ASP) during the first half, which further pushed up the company's earnings.
Maybank's research, which was published last week, projected that the company might see its net profit triple in 2017 from its 2014 full-year financial result, on the back of its stronger palm oil business as well as from rising sugar business.
Tunas Baru Lampung is one of the country's licensed raw sugar importers.
Sugar is expected to contribute around 50 percent to the company's earnings in 2017, the research says, on the back of its newly launched sugar refinery late last year as well as an integrated sugar mill in 2016.
Tunas Baru Lampung has 216,000 installed capacity in its sugar refineries and will have 120,000 tons capacity in integrated mill. The company is also expected to convert 15,000 hectares of former oil palm plantation into sugarcane plantation in 2016.
In the past decade, sugar consumption soared by around 65 percent from 3.34 million tons in 2004 to 5.52 million tons in 2013.
Shares of Tunas Baru Lampung, listed under the code TBLA on the bourse, rose by 2.24 percent on a daily basis to close at Rp 685 after the private placement plan was announced.
'JP/Anggi M. Lubis
